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Rajit Aggarwal (Self employed)     16 August 2016

Is landowner a service provider if he is not the builder

Let's say the license for developing a residential project is held by ABC. But the flats are constructed and sold by XYZ. Consumer enters into agreement with XYZ to buy a flat. In case of deficiency of services, can ABC be made party to the dispute in a capacity of a service provider?

Can you mention some supporting judgements?


 3 Replies

G.L.N. Prasad (Retired employee.)     17 August 2016

The consumer must prove the specific deficiency of service of land owner in the transaction and his involvement in such affairs with builder.  Burden of proof rests on them.  Get a suitable agreement drafted by your advocate between you and builder clearlly stipulating that you are not concerned with their financial transactions and your role is limited to ownership only.  (subject to the important fact that you are having a good title for such ownership) to insulate yourself against such cases in future.  This stipulation should be stated by the buyer in writing with every purchase agreement, that the agreement is between builder and purchaser and land owner is not connected with these financial transactions.

1 Like

Kishor Mehta (CEO)     17 August 2016

Sir, If the landlord is a party and signatory to the document entered into between the buyer and developer, then he can be made a party in the dispute. Good luck, Kishor Mehta
1 Like

Rajit Aggarwal (Self employed)     17 August 2016

Thanks Mr Prasad and Mr Kishor. The seller, that is, XYZ, mentions that the land parcel is owned by ABC and that the license to develop is with him. However, ABC is not a signatory to the agreement. My understanding is that ABC is required under law to fulfil its obligations with respect to the conditions imposed on him by the licensing authority while granting the license. Secondly given that he is mentioned in the agreement isn't it implied that he is privy to the agreement? Also, since there has to be a commercial agreement between the landowner and the builder, the landowner also stands to beenfit by the consideration paid by me to the builder. Since he has indirectly benefited isn't he also obligated to ensure that the service is provided as agreed?

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